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Wednesday, January 23, 2013

A California insurer and its sister company are being fined $250,000 for multiple violations of Washington’s insurance laws.

Health Net Health Plan of Oregon, Inc. and Health Net Life Insurance Co., of Woodland Hills, Calif., have signed a consent order jointly agreeing to pay the fine.

The violations include:

• As an illegal inducement to keep customers, the companies offered an unapproved premium holiday – a month of free insurance -- to hundreds of customers. (State law says that insurers must use the rates they file with state regulators.)

• Customers were transferred to new plans with a different company, but were wrongly told that the change was simply a “renewal” of the policy.

• By not telling customers that they had been transferred to a different company, the companies also violated a state law requiring insurers to use their own names.

“I’m all for consumers getting a break on their health insurance premiums,” said Insurance Commissioner Mike Kreidler. “But insurers have to follow the same rules their competitors do. If they say they’re going to charge a particular rate, that’s the rate they should use.”